Iranian SMEs receive $1.9b in Loans in 10 Months

EghtesadOnline: As many as 11,232 small- and medium-sized enterprises have received an aggregate of 79 trillion rials ($1.97 billion) in loans during the 10 months to January 19, 2017, according to the chairman of Iran Small Industries and Industrial Parks Organization.

News ID: ۷۷۳۵۸۶

30 January 2017

Ali Yazdani, who is also a deputy minister of industries, mining and trade, added that the loans are part of a stimulus plan prepared by the government's economic team, based on which loans worth 160 trillion rials ($4 billion) are to be given to struggling SMEs in the industrial and agricultural sectors, IRNA reported.

By definition, enterprises run by 50 workers or less, and 100 workers or less are considered small- and medium-sized respectively, according to Iran’s Small Industries and Industrial Parks Organization.

In July 2016, it was announced that 96% of the 88,000 licensed Iranian businesses are considered small- and medium-sized, Financial Tribune reported.

According to another deputy minister of industries, mining and trade, Reza Rahmani, some 20,000 industrial units have emerged from recession since the beginning of the current Iranian year (March 20, 2016).

According to Farshad Moqimi, the deputy head of Iran’s Small Industries and Industrial Parks Organization, Iranian SMEs have attracted $1.84 billion in foreign direct investment since President Hassan Rouhani took office in August 2013, of which $653 million have been invested after the implementation of Iran’s nuclear deal.

“Since Rouhani became president, foreign investors have signed 47 contracts to establish small- and medium-sized industrial enterprises and create 2,740 jobs,” he said.

“These contracts have been signed by Turkey, Azerbaijan, Ireland, Japan, Iraq, Afghanistan, Croatia, China, Germany, France, Turkmenistan and the UAE.”

Seven of the 47 contracts have been signed since the removal of sanctions.

Of all the agreements, Moqimi noted that 25 projects have become operational and the rest are either under construction or their machinery are being installed.

Back in May, Iran Chamber of Commerce, Industries, Mining and Agriculture hosted a delegation of World Bank experts who had come to assess the situation for the provision of loans to small- and medium-sized enterprises.

“We might be able to get them to provide us with at least $1.5 billion to $2 billion in loans, if we can convince them of Iranian SMEs’ potential and capabilities,” said Mohsen Jalalpour who was then the ICCIMA president.

In a move initiated by Iran Fara Bourse, the over-the-market exchange launched a platform for trading SME shares in December.

“The advent of SMEs in the capital market will help drive the economy toward greater transparency. It will also spur employment and growth by funding smaller businesses,” said CEO of Securities and Exchange Organization Shapour Mohammadi.